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Hr strategic planning.
HR strategic planning involves the identification of and response to HR functional and talent risks that inhibit the successful execution of strategic priorities. It refers to the way that HR leaders plan for business risks and opportunities by prioritizing and allocating resources to HR initiatives. This involves aligning business and HR strategies, defining HR priorities relative to critical business initiatives, and adjusting the execution of initiatives as business conditions change. HR leaders often need assistance with either making the business case for the HR strategic planning of specific initiatives for the coming year, or prioritizing resource allocation between several ongoing projects.
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Welcome to the HR Revolution: Strategic Human Resources Management
By Joe Weller | September 26, 2017 (updated November 19, 2021)
People are the most valued assets of any organization because they individually and collectively contribute to achieving objectives. But in a time of rapid change, how do you plan and make strategic human resources choices that will propel your organization toward its goals?
In this article, we define and discuss the roles and significance of strategic human resource management. In addition, three experts, including a business owner with HR expertise, an academic, and a specialist in organizational design, share their perspectives on the value of strategic human resource management, its function in change management, and best practices to help you continually improve and gain a competitive edge.
What Is Strategic Human Resource Management?
Strategic human resource management is an approach to the practice of human resources that addresses business challenges and makes a direct contribution to long-term objectives. The primary principle of strategic human resource management is to improve business performance and uphold a culture that inspires innovation and works unremittingly to gain a competitive advantage. It’s a step above traditional human resources and has a wider reach throughout the organization.
Strategic human resource management has no set definition nor one specific model that practitioners follow. There are organizations, like the American College of Healthcare Executives (ACHE) , that suggest best practices for their own profession.
The framework that does apply universally to the discipline of strategic human resource management is the link between it and the overall business strategy.
Strategic Human Resource Management’s Relationship to Business Strategy
Reaching ultimate business goals requires leadership. Strategic human resource management encompasses the traditional human resources functions of recruiting, screening, interviewing, and hiring employees, but also works with the overall organizational strategy to achieve success.
The Roots of Strategic Human Resource Management
Mitchell Langbert, Ph.D. , is Associate Professor of Business at Brooklyn College. Langbert’s experience includes positions with Fortune -ranked firms and the New York State Assembly Ways and Means Committee. His areas of expertise and research focus on human resource management, business ethics, and higher education issues. Widely published, Langbert has been an expert witness in human resource legal cases, including In re Tittle et. al. v. Enron et. al .
Langbert says that strategic human resource management grew out of important social and historical events: “Industrial psychologists and reformers laid the groundwork for human resource management in the early twentieth century. A few of the developments that led to an interest in Human Resource Management include the development of psychological, especially IQ testing during World War I, the social work and YMCA movements that helped immigrant workers adjust to industrial life, and the threat of labor unions and strikes.”
HR managers saw themselves as having a unique role. “They often viewed themselves as psychologists, or as specialists outside the mainstream of the business” says Langbert. “Recall, in the 1947 film Miracle on 34th Street , the HR manager who fancies himself a psychologist and ham-handedly attempts to commit Santa Claus.”
Langbert continues, “In his classic book on business strategy, Competitive Strategy , Michael Porter points out that in the development of strategic advantage, human resources is an essential element. Take, for example, Japanese auto companies. They rose to ascendancy in the 1970s through long-term thinking about human resource management (e.g., lifetime employment). They continued to rise in the 1980s and 90s through the total quality management movement as well as through the use of organizational culture that had become dominant.”
How did we get to strategic human resource management? Langbert says, “The increasing emphasis on technology and services has further enhanced the importance of HR as a strategic variable.”
Strategic Human Resource Management Is About Working Hand in Hand with the C-Suite
Kimmie Marek is Chief Creative Officer and Co-Owner of 7 Charming Sisters , a jewelry company. She uses her Professional in Human Resources (PHR) degree to grow her business. In her view, “Strategic human resources management is all about forecasting and partnering with other departments to get ahead of current operations.”
She adds, “Historically, HR has been reactive. Directives would come from the top and HR would need to adjust accordingly. In Strategic Human Resource Management, HR has a seat at the table and works hand in hand with Chief Operations Executives to forecast staffing needs, pipeline succession, and other HR wheelhouses to determine how to support the organization proactively.”
Growth Mindset Framework and Strategic Human Resource Management
Reed Deshler , a former HR executive, is an Organization Design and Change Leader with AlignOrg Solutions and author of Mastering the Cube: Overcoming Stumbling Blocks and Building an Organization That Works . Reed has facilitated many companies’ strategic plans. These plans have led to greater operational efficiencies and cost savings.
In his article, “How HR Executives Can Enhance Strategic Management Processes,” Deshler writes, “Effective HR executives should be growth mindset catalysts and multiply such thinking wherever they are involved. In many ways, HR executives can ‘set the perfect stage’ for the organization to realize the most meaningful change.” He adds, “Done right, their conscious structuring of the perfect environment can lead a team to greater overall success.”
Efficient HR Functions Support Strategic Human Resource Management
Managing basic human resources functions is an essential element of overall organizational success and an indispensable component of effective strategic human resource management. For information and free templates to keep your human resources running smoothly, read Top Excel Templates for Human Resources . The article includes useful tools, like the one below, concerning a staffing/recruiting plan:
Strategic Planning in Human Resource Management
HR leaders in successful international companies, like Starbucks and Coca-Cola, make proactive decisions and are an integral part of the organization's strategy team. A majority of these leaders state that strategic planning is part of their role. Deshler notes that startups and smaller organizations should pay attention: If big players use the strategic human resource management approach, they too may want to use strategic human resource management to help their businesses thrive.
Creating your strategic human resource management approach begins with writing a plan based on your organization’s strategic goal. Start with a SWOT analysis (strengths, weaknesses, opportunities, and threats).
SWOT Analysis Strategy Template
Understanding strengths, weaknesses, opportunities, and threats is the basis of every strategic plan. Seeing these factors side by side clarifies what to address to formulate a powerful strategic human resource management plan.
Download SWOT Analysis Strategy Template - Excel
As you continue to work on your written plan, focus on gaps that exist in the organization’s current situation, and create your strategy with a focus on your mission and an eye toward the future. For best results, involve line managers in the process.
Strategic Human Resource Management Plan Template
Organize your strategic HR plan and share it with team members for their input. Add your completed SWOT analysis. Use the template as is, or modify it based on your requirements, and translate your strategies into measurable action plans. This simple layout makes it easy for stakeholders to review critical information.
Download HR Strategic Plan Template
Roles in Strategic Resource Management and the New Economy
“ In Human Resource Champions (1996), David Ulrich argues that there are four HR roles: strategic player, administrative expert, employee champion, and change agent,” says Langbert. “The traditional psychologist and union avoidance are implied in the administrative expert and employee champion roles.”
According to Langbert, in the new economy, there are different considerations: “The strategic player and change agent roles suggest that HR managers need to collaborate with both line managers and employees. They need to think about and design HR systems that match culture, technological process, and organizational structure with the aim of supporting top management’s strategic thinking.”
Langbert provides examples: “In cost-competitive firms like Wal-Mart, HR needs to think about cost minimization. In the differentiation and focus companies of the new economy (businesses that Warren Buffett would say have a wide moat), HR needs to help identify training, selection, and performance management systems that support top management’s objectives to innovate, focus on customer needs, improve processes, and improve service.”
The Benefits and Competitive Advantages of Strategic Human Resource Management
The greatest benefit of strategic human resource management is also its purpose: to improve organizational performance by integrating and aligning with business strategy.
“Strategic human resource management is certainly a competitive advantage. In manufacturing firms, quality processes depend on stable HR systems. In service companies, HR provides training, rewards, performance management, and employee selection support that enable businesses to serve customers best. Great hotels, whether high-end ones like the Four Seasons chain or more modest ones like Hampton Inn, utilize quality processes that depend on training, support, employee selection, and rewards,” says Lambert.
By creating systems to achieve better organizational performance, strategic human resource management promotes the following benefits:
- HR-Related Outcomes: Lower turnover, reduced absenteeism, increased job satisfaction, and higher employee commitment
- Organizational Outcomes: Heightened productivity, quality, service, efficiencies, and customer satisfaction
- Financial Outcomes: Higher profits, sales, return on assets, and return on investment
- Capital Market Outcomes: Increased market share, stock price, and growth
Deshler says that a company can achieve these benefits only if the strategic human resource management aligns with the business strategy. “Strategic human resource management by itself is not a competitive advantage for most organizations — in fact, this is where I believe we sometimes go wrong. Strategic human resource management work is strategic when it enables the strategy of the business. Too many HR executives have pursued programs and HR capabilities that the company didn’t want or need. Of course, we are well-intended as we recommend and build strategic human resource management capabilities, but a careful eye must be kept on how these capabilities will enable business strategy,” he emphasizes. Research ( The Impact of Strategic Human Resource Management on Organizational Performance , The Importance of Human Resource Management in Strategic Sustainability: An Art and Science Perspective , and The Role of Strategic Human Resource Management in Creation of Competitive Advantages ) offers evidence that using progressive HR approaches achieves significantly better financial results.
The Role of Strategic Human Resource Management in Strategic Change
The primary goal of change management is to successfully implement new processes, products, and business strategies while minimizing adverse outcomes. Strategic human resource management and strategic change are tightly interconnected.
“Changes in policies, process, products, markets, culture, or mission depend on HR on many levels. New approaches often require new ways of thinking about compensation and rewards, for instance,” says Langbert. “A shift to a more dynamic style of doing business might demand the implementation of at-risk pay. New technologies require training programs. Top management needs to think about cultural issues, impacts on employee morale, how layoffs will affect the culture and morale, and similar problems.” Deshler offers his perspective on what it takes to move change forward: “Change is constantly happening in every organization, but most organizations lack robust organizational capabilities around change. Yes, there might be some change experts on the team, or there might be some tools lying around, but to build a truly strategic change capability, HR leaders need to be thinking about how they will create a change platform that combines traditional change management and program management. A change platform not only has a model for change and some tools, but also has a mechanism for training leaders and practitioners, temporary structures and roles to drive the change, project timelines and risks/issues, and means of measuring progress. Without all of these elements, strategic change results can be spotty.”
Organizational Change Management Communications Plan
Keeping team members informed about impending changes makes transitions smoother and less stressful. Use this template to keep track of the communications process and ensure that you stay on schedule.
Download Change Management Communications Plan Template
Change Impact Assessment Template
Every change impacts team members and business performance. Before you initiate changes, impact assessment will help you determine how alterations may affect team members, processes, and systems. Examine impact timing, risks to consider, and actions that may help mitigate the impact. Use this template on its own to assess changes, or add it to an overall HR plan.
Download Change Impact Assessment Template
Excel | Smartsheet
Change Management Policy Template
This template provides an outline for change management, from clarifying the type and scope of changes, to identifying the roles and responsibilities for affected team members, to assessing risk factors. Include detailed information on the control process you will employ and the procedures to follow.
Download Change Management Policy Template - Word
Transition Plan Template
When moving team members to fill different roles in your organization, a written transition plan can reduce information loss. This template helps the person previously in the role connect with and train the new team member. Input start and end dates, tasks, goals, assumptions, and more.
Download Transition Plan Excel Template
Barriers to Strategic Human Resource Management
HR departments may need to overcome their ideas and discomfort to achieve long-term goals. As Deshler notes, “Change is difficult. Strategic human resource management has been trending upward for decades but continues to challenge HR professionals due to their resistance and other forces.” Here are the resistance factors you may encounter:
- Fear of Failure: Strategic human resource management is a significant shift for the people in organizations, particularly because of metrics and the need for transparency. Senior-level managers may resist taking strategic steps because of a fear of incompetence. There may also be a fear of victimization in the wake of potential failure.
- Lack of Commitment/Cooperation: A status-quo approach from employees is a barrier to change. You may not have buy-in from all of the senior management team. Unresolved interdepartmental conflicts may make it difficult to adopt a new approach. There may also be leadership conflict over the question of authority.
- Resource Challenges: There may be real or perceived time and resource limits.
- Outside Pressures: Immediate economic and market pressures may prevent the adoption of strategic human resource management. The organization may be vulnerable to legislative changes. The resistance may also come from labor unions.
How can you overcome these barriers? Effectively communicating the benefits and strong leadership from senior management can remove the fear of failure and lack of commitment and cooperation. To deal with resource challenges, senior management can provide appropriate budgets and reassign tasks to make strategic human resource management feasible. It may not be possible to mitigate outside pressures immediately, but planning can take place to set up for the future. You can also overcome the resistance to change through the use of best practices discussed in the following section.
Best Practices in Strategic Human Resource Management
Every organization needs to create its own detailed best practices since, by its very nature, strategic human resource management planning should be tailored to each specific organization.
Marek believes that metrics are a must: “Some key metrics a strategic HR professional must always analyze are turnover, available workforce, growth needs, current staffing needs, and at-risk employee positions. In the event of a turnover, at-risk employee groups must always have a pipeline succession in place to fill key positions.”
To help provide a framework, here are actions to consider as you refine your process:
Download Strategic Human Resource Management Best Practices Checklist
Retention and Onboarding in Strategic Human Resource Management
Hiring the right team members is time consuming and expensive, so retention is a major factor in meeting business goals. Onboarding, or organizational socialization, is a best practice that helps new hires at all levels learn the ropes. Learn more by reading Employee Onboarding Processes: Plans, Best Practices, Flowcharts .
Onboarding Plan Template
Use this template to generate an overall plan for activities to complete at each stage of onboarding. Note contacts in the far-left column. The remainder of the spreadsheet shows the onboarding tasks assigned to each contact throughout the year. Add or remove columns as needed to create your comprehensive onboarding plan.
Download Onboarding Plan Template
Executive Onboarding Template
While it’s important for an executive in a new position to hit the ground running, their onboarding process is often more complex and individualized than that for a new hourly employee. Due to the potential financial risk an organization faces if the hire doesn’t work out, it’s essential to follow a careful onboarding process. Based on skills, goals, and identified areas for growth, this template includes input from the individual to help tailor the onboarding process.
Download Executive Onboarding Template
Onboarding Feedback Form
For many processes, honest feedback provides the best path to continuous improvement. An onboarding survey will provide insights on what is and isn’t working in your existing process and will help you reach your goals for productivity, performance, and employee retention.
Download Onboarding Feedback Form
Trends and Predictions for the Future of Strategic Human Resource Management
Deshler says, “There are two trends I see in strategic human resource management. The first is that strategic change is occurring more often and in more areas simultaneously. HR executives and practitioners need to think about how they lead when there are numerous simultaneous changes. The second is that organizations are adopting more agile ways of working — a great opportunity. It means that HR leaders and practitioners think differently about the speed at which they design and implement strategic human resource management programs. They will have to get used to less precision and have more comfort with delivering ‘minimally viable products."
Where is strategic human resource management headed? Langbert predicts, “Technological innovation will continue apace, as will the need for training. Diversity has many benefits, but it also requires management and support. Employee benefits will remain a sensitive area as the aging population makes increasing demands on firms’ benefits programs. The economy will be a competitive place, and customer service and interpersonal skills training will be in demand. Back in the early days of the internet, some of my students thought that technology would reduce the need for interpersonal and other management skills. The reverse is true. As technology becomes ever more sophisticated, the need for technologically adept, highly motivated workers will become even greater. Managers will need to grapple with discontinuity and change, and HR will continue to play an increasingly sophisticated role.” Strategic Human Resource Management Leadership Skills Can Take Professionals to a New Level Being a Chief Human Resources Officer requires a high level of sophistication and a wide variety of skills: commercial acumen, comprehension of cultural differences, awareness of shifting demographics, change management talents, and the ability to act as an advisor to executives and the board. These capabilities are vital in the new economy and are more frequently leading to president and CEO roles . A Harvard Business Review article, “ The New Path to the C-Suite ,” notes that CHROs have what it takes to make it to the top office in the company, and research by Korn-Ferry found that strategic human resource management skills may be the future’s professional stepping stone to the top business leadership roles.
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4 steps to strategic human resource planning
Reading time: about 7 min
4 steps to strategic human resources planning
- Assess current HR capacity
- Forecast HR requirements
- Develop talent strategies
- Review and evaluate
It’s easy to understand the importance of the human resource management planning process—the process by which organizations determine how to properly staff to meet business needs and customer demands. But despite its obvious importance, many organizations do not have a strategic human resource planning process in place, with many HR professionals reporting their departments need to improve strategic alignment.
If you’ve considered developing an HR planning process, you’re in the right place. This article will explain what human resource planning entails and how to document your strategic plan. With this knowledge under your belt, you’ll be filling positions and growing as a company in no time.
Introduction to strategic human resource planning
In order to improve the strategic alignment of staff and other resources, it’s essential to understand how to create a strategic HR planning process. At its most basic level, strategic human resource planning ensures adequate staffing to meet your organization’s operational goals, matching the right people with the right skills at the right time.
It’s important to ask where your organization stands currently and where it is going for your plan to remain flexible. Each company’s plan will look slightly different depending on its current and future needs, but there is a basic structure that you can follow to ensure you’re on the right track.
The strategic human resource planning process begins with an assessment of your current staff, evaluating whether it fits the organization’s needs. After that, you can move on to forecasting future staffing needs based on business goals. From there, you’ll need to align your organization’s strategy with employment planning and implement a plan to not only to hire new employees but also to retain and properly train the new hires—and your current employees—based on business changes.
Read on to understand human resource planning in more detail.
1. Assess current HR capacity
The first step in the human resource planning process is to assess your current staff. Before making any moves to hire new employees for your organization, it’s important to understand the talent you already have at your disposal. Develop a skills inventory for each of your current employees.
You can do this in a number of ways, such as asking employees to self-evaluate with a questionnaire, looking over past performance reviews, or using an approach that combines the two. Use the template below to visualize that data.
2. Forecast HR requirements
Once you have a full inventory of the resources you already have at your disposal, it’s time to begin forecasting future needs. Will your company need to grow its human resources in number? Will you need to stick to your current staff but improve their productivity through efficiency or new skills training? Are there potential employees available in the marketplace?
It is important to assess both your company’s demand for qualified employees and the supply of those employees either within the organization or outside of it. You’ll need to carefully manage that supply and demand.
Demand forecasting is the detailed process of determining future human resources needs in terms of quantity—the number of employees needed—and quality—the caliber of talent required to meet the company's current and future needs.
Supply forecasting determines the current resources available to meet the demands. With your previous skills inventory, you’ll know which employees in your organization are available to meet your current demand. You’ll also want to look outside of the organization for potential hires that can meet the needs not fulfilled by employees already present in the organization.
Need advice on calculating your staffing needs and developing a staffing plan?
Matching demand and supply
Matching the demand and supply is where the hiring process gets tricky—and where the rest of the human resources management planning process comes into place. You’ll develop a plan to link your organization’s demand for quality staff with the supply available in the market. You can achieve this by training current employees, hiring new employees, or combining the two approaches.
3. Develop talent strategies
In the recruitment phase of the talent development process , you begin the search for applicants that match the skills your company needs. This phase can involve posting on job websites, searching social networks like LinkedIn for qualified potential employees, and encouraging current employees to recommend people they know who might be a good fit.
Once you have connected with a pool of qualified applicants, conduct interviews and skills evaluations to determine the best fit for your organization. If you have properly forecasted supply and demand, you should have no trouble finding the right people for the right roles.
Decide the final candidates for the open positions and extend offers.
to find the best candidates for your company.
Training and development
After hiring your new employees, it's time to bring them on board. Organize training to get them up to speed on your company’s procedures. Encourage them to continue to develop their skills to fit your company’s needs as they change. Find more ideas on how to develop your own employee onboarding process , and then get started with this onboarding timeline template.
Employee remuneration and benefits administration
Keep your current employees and new hires happy by offering competitive salary and benefit packages and by properly rewarding employees who go above and beyond. Retaining good employees will save your company a lot of time and money in the long run.
Institute regular performance reviews for all employees. Identify successes and areas of improvement. Keep employees performing well with incentives for good performance.
A strong company culture is integral in attracting top talent. Beyond that, make sure your company is maintaining a safe work environment for all, focusing on employee health, safety, and quality of work life.
4. Review and evaluate
Once your human resource process plan has been in place for a set amount of time, you can evaluate whether the plan has helped the company to achieve its goals in factors like production, profit, employee retention, and employee satisfaction. If everything is running smoothly, continue with the plan, but if there are roadblocks along the way, you can always change up different aspects to better suit your company’s needs.
Why document your strategic HR plan
Now that you know the steps to strategic human resource planning, it's time to adapt those steps to your own organization and determine how to execute.
There are a number of reasons to document your strategic human resources plan, particularly in a visual format like a flowchart. Through documentation, you standardize the process, enabling repeated success. Documentation also allows for better evaluation, so you know what parts of your plan need work. In addition, a properly documented plan allows you to better communicate the plan throughout the organization, including how everyone, from the top down, can contribute to make sure the plan works.
Document every step of the process, from beginning to end, and find room for improvement in your human resources process along the way.
Start creating your own strategic human resource plan with this template.
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Blog Human Resources
6 Steps to Create a Strategic HR Plan [With Templates]
By Jessie Strongitharm , Aug 25, 2022
The backbone of any successful business is the people and processes behind it — that’s why creating a human resources (HR) plan is key. This strategic document drives your business forward by evaluating where your workforce is at, and comparing it to future needs.
Without an HR plan, organizations can suffer from issues that would have otherwise been avoided. From productivity pitfalls to costly employee turnover, there’s no shortage of risks you can sidestep if you do human resource planning in advance.
Not sure where to start? No worries. I’ve outlined six steps you can take to create an effective HR plan that ensures your organization is well-staffed and well-served. You’ll also find a variety of HR templates that you can customize in just a few clicks — no design expertise required.
Click to jump ahead:
What is human resource planning.
- Assess employees’ current skill levels
- Forecast your labor needs based on available information
- Revisit your organizational design
- Outline how you will manage, motivate and retain talent
- Align your workforce planning with your budget
- Establish KPIs for your human resource planning objectives
Human resource planning is the process of considering the current and future “people needs” of an organization.
This involves evaluating an organization’s workforce structure and protocols to ensure operational goals are met, productivity stays high and future demands for labor and talent can be fulfilled.
The result of this process is the creation of an HR plan, which typically takes the form of a written document. These documents tend to follow a similar structure to most strategic business plans and are created on an annual basis, by HR managers or company leaders.
Check out the template below for an example.
This eye-catching, one-page HR Strategic Plan Template offers a concise summary of your human resource planning efforts, so you can easily share info with colleagues.
Just swap out the text and visual assets for those of your choosing in Venngage’s editor , and you’re off to the races.
Return to Table of Contents
Start creating a strategic HR plan in 6 steps
Ready to create a strategic plan for the human resources that power your business? Here are six steps to help you succeed at the human resource planning process.
- Assess current employees’ skill levels
The first step to creating a future-forward HR plan is to assess employees’ current skill sets, and compare them to your operational needs moving forward. This will help you identify gaps and inform any hiring of new employees.
Employees’ skill levels can be assessed by reviewing their work history, hard and soft skills and professional growth over time.
Using a matrix is a great way to understand where the skill gaps in your current workforce exist. Below is an example that describes the skills needed for different marketing roles.
Don’t need it for marketing specifically? No worries — you can fully customize this template by swapping in your own text to examine any human resource gaps.
Another way to assess skills is by giving employees a questionnaire they can fill out. This Employee Competency Assessment Template does just that.
Based on the information collected, you’ll get a sense of what positions best suit each individual, and whether any upskilling or hiring is required.
Next in your strategic strategic HR management plan, you’ll want to consider the future. This involves accounting for any upcoming changes to your workforce, so operations can continue without error.
When forecasting labor needs, the following should be considered:
- Planned promotions
- Upcoming retirements
- Personnel transfers
- Extended leaves of absence (i.e. maternity/paternity leave)
Beyond those, it’s a good idea to assess the impact of external conditions on your labor needs during your human resource planning. For example, new technological developments may decrease the amount of employees you require to operate your business.
Organizational design is the process of structuring the way a business operates so it can best achieve its goals. This is hugely important when it comes to your human resource planning process!
With a clear understanding of your organization’s strategic objectives in mind, reviewing your organizational design allows you to understand the staffing requirements you’ll need to succeed at them. This means taking into account your organizational structure and chains of command, as well as how work gets done and the way information flows.
From there, you’ll be able to see which departments need more team members so it can accomplish the organization’s objectives.
An easy way to get started is by using an organizational flow chart.
With its color coding and layout, even a new manager can quickly look at this chart to identify the people responsible for leading teams and making decisions.
And if there are any changes, it’s easy to to reflect them in the chart itself. All you need to do is customize the text and visual assets in Venngage’s Chart Maker as desired.
Not quite your style? There’s plenty of other organizational chart templates to choose from.
Here’s an organizational chart that’s perfect for small businesses that have limited employees. One quick look, and you’re good to go.
The bottom line is, no matter how big or small your business may be, you should always revisit your organizational design to optimize your workforce management and business operations.
Related: Types of Organizational Structure [+ Visualization Tips]
In this day and age, it’s a known fact that companies must provide more than just a paycheque to attract and retain talent, and encourage growth.
It’s true — studies have shown employees are more engaged in their work when they feel it is meaningful, fulfilling and slightly challenging. So your human resource plan should consider how to inspire such feelings, and what actions you can take to motivate employees to stay. (Hint: a strong HR training and development program is key.)
The talent management infographic template below is a great way to begin.
Using this process chart , you can detail the steps you’ll take to retain the talent you have. Reference it as needed in your human resource planning.
Another great way to keep staff motivated and geared towards their professional growth is by coming up with ideas for employee development . Facilitating a company culture that champions continuous learning guarantees your team will feel supported and challenged in all the right ways.
The two employee development plan templates below will help you do just that.
Though both templates are geared towards healthcare organizations, it’s easy to customize their content in Venngage to promote the continuous learning and development of employees in any industry.
As a result, your employees will be able to reach their full potential, while simultaneously supporting the long-term goals of your organization.
Related: 6 Employee Development Ideas for Efficient Training
Let’s face it, human resources ain’t cheap.
Meaning, if you struggle at organizing and monitoring your HR budget, you’re bound to overspend on your initiatives —and no financially savvy business wants that.
That’s why I recommend including financial information in your HR planning process, so you can reference your budget and expenses as needed. This ensures you’ll be able to stay within range as you work towards achieving your strategic goals for human capital .
Plus, you don’t need to use one that contains walls of text and wack-loads numbers. Check out the clean and cheery option below — it’s as easy to fill out as it is to understand.
And if you’re looking to compare a forecasted budget to previous annual spending when strategizing your HR budget, the Budget Comparison Infographic Template below will help.
The bar graph is a great data visualization of annual expenses, organized by category. Just add (or import) any values to Venngage’s editor, swap out the text, and you’re ready to compare with ease.
Related: 10+ Expense Report Templates You Can Edit Easily
Measurable results are important when it comes to your HR planning processes, because they indicate whether your strategy is working or not.
Keeping those metrics in mind, your company can make adjustments and improve upon any future plans — AKA strategize for future success in business. That’s why your human resource plan should include info re: the specific key performance indicators (KPI) you’ll be measuring.
KPIs are established to help determine if HR strategies and plans are working. Much like those used for evaluating the performance of marketing or sales plan , KPIs for human resources are measurable results that indicate an organization’s success at achieving predetermined goals.
These may take the form of headcounts, turnover rates, demographic information, time to hire and employee satisfaction scores.
Here’s one employee satisfaction survey you can use to understand your workforce better.
When you’re ready to organize those HR KPIs in a document, the recruiting template below is perfect for keeping tabs at a glance.
Related: 10+ Customizable HR Report Templates & Examples
How do I make an HR plan?
After you’ve collected the data you need, you’ll want to convey this info in an engaging, professional manner for easy referencing and sharing amongst colleagues. Given this, using Venngage is the best route to go.
Here are the simple steps to help you bring an actionable HR plan to life:
- Outline the information you would like to include in your strategic hr plan
- Pick the human resource planning templates that best suits your needs
- Customize the templates’ text and visual assets so they speak to your organization
- Apply your company’s brand guidelines with a few clicks using Venngage’s automated branding feature, My Brand Kit
- Download and share as desired
Note: sharing is available free-of-charge. However, the option to download your creations and access features like My Brand Kit and Team Collaboration are available with a Business plan .
FAQ about HR plans
How long should an hr plan be .
There are no hard and fast rules when it comes to the length of an HR plan. That being said, if you’re going to share it with colleagues, you probably don’t want to create a 20+ page document. One to five pages should suffice.
Try to be as concise as possible when relaying the facts, and use data visualizations wherever possible to save room.
Do I need an HR contingency plan?
In the same way creating an HR plan is a proactive move that helps your organization account for future needs, it’s a good idea to devise an HR contingency plan. This ensures there’s a back-up plan in place should your initiatives not go as expected.
For example, if you’ve identified that you need five new hires to keep up with consumer demand, but the talent pool is lacking, a contingency plan could house suggestions for restructuring your workforce to mitigate this.
In other words, it’s best-practice to hope for the best, but prepare for the worst.
Is an HR plan different from an employee development plan?
Yes. While an HR plan is a strategic document describing how an organization addresses its personnel-related needs at a high-level, an employee development plan outlines the processes needed to help an individual achieve their professional goals.
Even though the human resource planning process may involve outlining some employee development tactics, it is not unique to each employee as in the case of an employee development plan.
Make your HR planning processes effortless
You don’t need a crystal ball to feel confident about your people moving forward. With a solid HR plan and strategy in place, you’ll prime your workforce — and all business endeavors — to succeed in even the most competitive of markets.
Just remember this: human resources planning, and creating strategic business plans in general, doesn’t have to be exhausting.
With Venngage’s huge selection of professionally-designed templates and easy-to-use editor, all it takes is a few minutes to produce a polished document perfect for all your needs. Sign up for free today !
8 Actionable Long-term HR Strategy Plan Examples
Failing to plan is the same as planning to fail when it comes to managing your people. here are five essential reasons why you need to think strategically about human resources..
In any organisation, large or small, three fundamental systems of record form the business backbone; accounting and finance, customer relationship management and HR and employee management.
Many businesses now take a strategic approach to managing these key areas by using cloud technologies to run their accounting and finance processes in real-time, as well as manage their customer relationships.
However, many businesses continue to persist with a more reactive approach to HR. That’s why it’s time to start building your own human resources strategic plan (otherwise known as an HR strategy). Failing to plan is the same as planning to fail when it comes to managing your people.
What is a Human Resources Strategy plan?
An HR department in every business is responsible for finding and training employees. Besides that, they also help with conflict resolution, employee benefits, employee retention and development. A human resource strategy plan is taking those responsibilities and making sure they meet the goals, mission and future needs of the company.
What are the benefits of creating HR strategies?
We all know that the role of human resources and people management is changing . By implementing strategic human resources management, you’ll have a crystal clear vision of your goals and how to achieve them.
Read on to find out the benefits of having an HR strategy in place.
1. Forecasting talent requirements
Being able to develop realistic forecasts of your people’s needs now and in the future is essential if you’re going to win the war on talent. On a day-to-day level, being able to optimise shift allocation will help you achieve efficiencies and reduce your wage bill.
Also, if you know how many staff you require to achieve the future strategic goals of the business and what jobs need to be filled, you can get an early start on finding the right talent.
2. Non-compliance costs
Everything from payroll to onboarding, performance management and employee data management comes with a huge amount of compliance and paperwork. Using spreadsheets and manual processes is not only time-consuming, but they are also prone to human error. And this means business risk.
By using strategic planning, you can identify any possible compliance gaps and keep your business in line with employment legislation.
3. Happy employees are more productive
Beyond hiring the right candidate, a good HR strategy plays an important role in promoting employee engagement and satisfaction. These areas are crucial to developing a happy, productive workforce who become great ambassadors for your business.
With an HR strategic plan, you can formulate what is required of you to take care of your employees’ needs. It also keeps a check on morale, measures productivity and your employees’ sense of commitment.
Employee engagement goes hand in hand with retention. Once you’ve built a team of great people, you need to keep hold of them. So a big part of the overall business strategy needs to be focused on what you can do to retain employees. This includes ways to build your employees careers through formal recognition programs and career development pathways.
5. Continuous improvement
Everyone knows that you can’t improve what you don’t measure. Without a strategic HR plan, how can you possibly understand what’s working and what’s not?
Through HR strategies, you can formally evaluate specific and measurable factors such as; employee turnover, the number of vacant positions, employee grievances, as well as satisfaction and dissatisfaction levels.
If you periodically gather and report data on what’s working, you’re much more likely to make consistent and accurate decisions.
Read more: All you need to know about HR management
Intro to HR Management
8 things to implement for a successful HR strategy
Taking a proactive approach to managing your people will put your business on the front foot— ready to identify and solve HR issues. By developing an HR strategic plan, you can reflect on the successes and failures of previous quarters. Doing so will help you effectively plan for attracting and retaining the right talent, which is key to your business achieving success.
Here are some HR strategy examples you can implement to gain a competitive advantage through your HR department.
1. Conduct regular HR audits
The beginning of the year is the perfect time to conduct a review of your HR processes and compliance. While these should continually be reviewed, it’s important to assess them at the start of each calendar year.
Human resources audits are an effective way to perform a gap analysis and review your current people management processes and obligations. By conducting an audit, you will be able to update any legalities and also see where improvements can be made, which can be included in your new HR strategy.
Common areas to complete an HR audit include:
- Record keeping
- Performance reviews
- Policies and procedures
- Health and Safety
Read more: The future of HR automation
2. Set goals aligning with your business strategy
If you’re looking for information on how to introduce a goal-setting framework so you (and your entire team) can plan your goals effectively, we suggest giving thought to OKRs (Objectives and Key Results) .
While OKRs are not as well known as their popular counterpart, key performance indicators (KPI), OKRs are a great tool to complement your company’s HR strategy.
They’re a transparent way to keep your team accountable and motivated whilst ensuring that your goals are 100% aligned at an individual, team and company level. If you’re looking for an all-in-one HR software that includes a visual OKR feature, get in touch with us today .
We can walk you through how Employment Hero can help simplify and align your company goals, so you continue to create a team of engaged, high performers.
3. Design the employee experience
When it comes to business, your employees are everything. They keep the wheels turning and are the heart and soul of everything you do. But have you ever thought about the experience they have as an employee?
From acquisition to onboarding, training and recognition, there are so many pieces to the employee experience puzzle that can set your workplace above the rest. When designing the employee experience, it’s crucial you map out every stage of the employee lifecycle and visualise your ideal scenario.
This allows you to create the perfect recipe for your employee experience.
Read more: How to empower employees with employee self service
An example of a designed employee experience
1. Attraction : Work with marketing to have a strong employer branding presence across social. Using social media and employee advocacy to recruit top talent to your business is a great way to keep your candidate funnel full.
2. Recruitment : Having a set interview process that ensures you hire the right person. This may include candidates having to complete a task or assignment.
3. Onboarding : Ensuring that the onboarding process includes information about their specific role and the wider organisation. It might also see you start new employees in a cohort instead of scattered days so they can complete induction together. Beyond the more technical parts of onboarding, consider ‘surprise and delight’ elements such as branded company merch and organising a special lunch with the hiring manager.
4. Development : Encouraging your employees to access online training and attend industry events that will improve their skills. Setting up an annual self-learning fund for each employee could be a good way to do this.
5. Retention : Creating professional development plans for your employees and rewarding them for great work. Using a goal-setting framework like OKRs and a well-thought-out career plan can make all the difference.
6. Separation : Create a way to support your employees through the exit process. This could be by a formal exit interview so you can improve and learn from experiences.
4. Improve your Employee Value Proposition (EVP)
If you’re not sure what an EVP is , it’s the balance of rewards, benefits and culture that the company can offer in return for amazing employee performance. In saying this, it’s important to remember that your employee value proposition extends beyond perks and benefits.
Why should you care about improving your EVP?
It’s an important piece of attracting top talent to your business. If you present well to a potential star candidate, they’re going to want to work for you. This in return, helps the human resources department recruit candidates a whole lot easier.
You might also even find that your time to fill roles decreases significantly. According to a study by People Scout , “when organisations live up to their marketed EVP, new employees arrive with a higher level of commitment at 38%, compared to organisations that don’t live up to their marketed EVP, which are at just 9%”.
When you get your EVP right and have star talent in your business, you can expect greater business growth as they’ll be more engaged in their role.
Read more: Emerging HR trends in the job market
5. Implement HR systems
If you’re looking to reduce the amount of time you spend on manual admin tasks and get strategic in your day-to-day, an HRIS can help you. By implementing an HR tech system like Employment Hero, you can reduce the amount of time you spend on admin tasks by up to 80%.
Just imagine no longer having to manually onboard an employee or keep employee files in dusty old filing cabinets! It’s also a great piece of tech to add to your long-term HR strategy!
6. Provide professional development plans for employees
According to LinkedIn’s 2018 Learning Report , a massive 93% of employees said they would stay at a job longer if the company invested in their learning and development. This is a sign that the majority of employees place this as a top factor when determining whether or not to jump ship. But the benefits aren’t just for the employee.
Creating a professional development plan for your employees is a two-way street and a vital piece of your long-term HR strategy. When you have acquired top talent and develop their skills even further, you’ll have star employees that will be just as invested in your company as much as you’re invested in them!
You’ll also save money in the long run, as you won’t face the hidden costs of recruitment associated with employee turnover.
Saving costs, developing your team and giving your employees what they want? It sounds like a great strategic HR move to us!
7. Improve employee advocacy
Your employees are your best cheerleaders, so it makes sense to use them to leverage your brand. Whether it’s by incorporating employee advocacy into your HR strategy or getting your teams’ LinkedIn profiles up to speed (hello branded cover images and profile pictures!), there are many ways you can leverage your employees’ professional networks.
Social media is one of the most cost-effective places to reach new and potential customers, so we say this is something you might want to get on board with, and pronto! While employee advocacy strategies are a fairly new concept, they’re beginning to gain momentum.
With this being said, those who take advantage of employee advocacy will be the ones reaping the rewards!
What are the benefits of employee advocacy?
- Improves the company’s social media reach
- Attracts new business and potential clients
- Improves company culture and office buzz
- Improves retention rates
8. Gen Z talent acquisition and retention strategy
Gen Z is beginning to enter the workforce, so it’s important you have a long-term HR strategy in place to attract them. Born between 1995 and 2015, Gen Z’ers are different from previous generations that have entered the job market.
Why is it important to have an acquisition strategy for Gen Z?
While Millennials have been in the spotlight for many years, we’re beginning to investigate the traits of Gen Z. With Gen Z entering by the masses, it’s important you know how to hire and retain them.
Gen Z has grown up around digital technology and are naturally tech-savvy compared to their older counterparts. This alone changes how you should recruit Gen Z.
According to our recent Gen Z at work report , Gen Z characteristics are:
- Risk adverse
- Open minded
As Gen Z are naturally tech-savvy and connected on social media, we would suggest advertising job ads with social media first approach. We could even see Tik Tok become the ‘it’ place to recruit top talent from Gen Z!
This is the perfect time of year to start looking into long-term HR strategy. From implementing an HR automation system like Employment Hero, to getting prepared for the influx of Gen Z candidates you’ll be recruiting for in the future, now’s the time to get planning.
If you need help demonstrating the value of implementing HR software as part of your HR strategy, read our blog on building a business case for HR software here.
To learn more about you can improve HR strategy and achieve your HR goals, get in touch and one of our small business HR experts to show you how today!
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How To Build Strong HR Management Strategies for Your Organization
What are HR management strategies?
Types of hr management strategies, how to develop an hr management strategy, how do you implement an hr management strategy, recruit and retain employees by building a people-centric hr strategy..
Your organization needs to attract the best talent in order to grow, but your current HR tools and practices might be hindering this growth. Strategic HR management looks beyond transactional HR basics with an eye to driving increased profits and growing your business.
It will help you and your fellow HR managers craft strategies that will help your business attract and retain the best talent. But how do you put these together, and what are the best strategies to use for your business?
A human resource strategy sets guidelines and expectations for how employees across your organization will be treated. Strategic HR allows companies to synthesize their human resources with wider organization goals and objectives. A strong HR software suite can be part of that strategy, but it isn't enough on its own.
Strategic human resource management stresses the importance of a people-centric approach. In an old-fashioned HR system, your HR reps are focused entirely on transactional duties. They post job openings, complete interviews, handle onboarding people, monitor workplace safety, and more. With strategic HR, you focus on the big picture instead. This approach helps to synthesize organizational goals with employees' needs to foster company success.
Strategic HR management leverages data that you've gathered about employees in order to identify where and how you need to develop people. It offers an array of benefits including:
A better work culture
Lower turnover rates
Increased customer and employee satisfaction
A boost in overall productivity
More efficient use of resources
More accurate employee performance tracking
Despite the benefits of holistic planning processes, only 47% of CEOs say that their organizations involve HR in larger planning discussions. [ 1 ] Integrating strategic human resource management during planning is essential—just remember that strategic planning should be ongoing and adaptable.
Strategic human resource management doesn't use a static set of rules. Instead, it can constantly be adapted to the needs and challenges of your organization. These strategies can be both overarching and specific. Overarching strategies address employee management on the whole, while specific strategies address different needs in areas such as recruitment, compensation, and employee development.
Some of the most effective HR strategies are:
Leveraging technology to automate transactional duties such as posting jobs and scheduling interviews.
Proactively planning for challenges instead of reacting to them in crisis mode.
Crafting a people-centric culture where employees feel valued and perform their best.
Before you can develop an HR strategy, you'll need to conduct a SWOT analysis that considers your organization's strengths, weaknesses, opportunities, and threats.
Define desired business outcomes
Once you've conducted a SWOT analysis, define what business outcomes your organization would like to achieve through strategic HR planning. These are the goals that you'll focus on as you map out ways for HR to meet them.
Create strategies to meet your HR goals
After you've identified goals for HR operations, you'll need to create strategies to help you meet them. For example, imagine that employee exit surveys show that most employees are quitting because they're frustrated by working with untrained managers. Your company might launch a training program to increase manager effectiveness in the hopes that it will cut down on turnover . Or, if you want to increase the caliber of talent your company attracts, you might need to consider revising compensation structures to meet that goal.
Take stock of your current HR capacity
Determine how many employees are needed to meet your current goals, and forecast how much those needs are expected to grow in the future. Think about the job roles, education, qualifications, and compensation concerns that are likely to arise. Consider the following:
The issues your organization currently faces with recruitment
How well-equipped employees are for their jobs
Whether employees have the tools and resources needed to drive company success
As you map out an HR strategy, focus on addressing the weaknesses and leveraging the opportunities you identified during your SWOT analysis. Identify company-wide or department-specific HR programs and policies that will support business development and prioritize them during planning.
Implementing your human resource management strategy requires clear communication about new expectations, policies, and programs. Remember that introducing these changes is just the first step in solidifying a strategic HR approach. You'll need to monitor outcomes on a monthly, quarterly, and yearly basis to determine how well strategies are meeting needs.
Many organizations create a steering committee that's responsible for reviewing outcomes and determining areas where strategy needs to be adjusted. Remember that strategic HR planning is about continuous, forward-thinking adaptation. When organizational priorities and conditions change, your HR strategy will need to change too.
Learn more about strategic HR management
Are you ready to learn more about strategic HR and associated initiatives? Check out these human resources blogs and articles:
Improve Thought Diversity by Embracing Generational Differences in the Workplace
A Recruiting Leader's Guide to Equitable Hiring Practices
The Value of Values: How HR Creates Value for Individuals, Leaders, Organizations
HR Strategy Planning , Gartner
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Dorothy Bond is a freelance writer specializing in education, law, and entertainment. Her work has been featured in digital publications and education blogs, including PopMatters and Outschool.
What is a job requisition and how to write one, exploring hr responsibilities: key areas of focus for effective human resource management, hr compensation and benefits: how to create a competitive package, top skills hr leaders need to increase effectiveness, how hr leaders can help managers set and achieve performance goals, a guide to effective employee performance management, capterra value report: a price comparison guide for recruiting software, types of compensation: a complete guide for hr professionals, what is performance appraisal a must-have for effective performance management.
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Home › Strategic Human Resources Management › What is Strategic Human Resource Management?
What is Strategic Human Resource Management?
TABLE OF CONTENTS
Strategic human resource management is a process that helps the human resources department maximize the potential of its workforce through strategic planning, talent management, leadership development, organizational design, and performance management.
In the past, strategic HR management was an administrative function. Today, HR managers play a critical role in ensuring that the organization has the right people that help improve business performance and ensure that it delivers on its mission.
It means that HR professionals need to understand its goals and objectives. How they can best help the organization achieve those goals, and what actions will allow them to do so. This article will help you better understand what strategic human resource management is and how a smart plan can bring tremendous value to the organization.
If you’re interested in learning more via video, then watch below. Otherwise, skip ahead.
What are Strategic HR Management Goals?
Strategic human resource management involves developing and implementing strategies for attracting, retaining, motivating, and managing talented individuals who contribute to the organization’s success. HRM also includes policies and practices designed to ensure fairness in employment relations.
Strategic human resource management aims to achieve a competitive advantage by creating value for customers, shareholders, employees, and other stakeholders. The term “strategy” refers to the organization’s overall plan of action to create value. It is not just one thing; it is a combination of many things, including:
- Actions are taken by the organization to meet customer needs
- Policies and procedures used to manage the organization
- Processes used to produce goods or services
- Marketing activities used to sell products and services
- Financial decisions made to fund operations
- Organizational structure
- The technology used to support business processes
- People-related issues such as recruitment, selection, training, compensation, benefits, and performance management
- Legal requirements and regulations affecting the organization
How Can Businesses Benefit from HR Strategic Planning?
Businesses benefit from strategic human resources management because it allows human resource departments to make better decisions. For example, companies can develop plans to improve productivity, reduce costs, increase profits, and enhance employee satisfaction. The sales and HR departments play a role in determining whether the company should expand into new markets, acquire another company, or merge with another business.
If you want to attract more customers, understand what your target market wants and how you can provide it. It would be best if you also decided which marketing methods would work best.
To retain current customers, you must first find out why they buy from you instead of competitors. Then you must figure out ways to keep them satisfied. You may even wish to consider offering discounts or gifts to reward loyal customers.
You must also think about motivating your employees to perform well and stay productive. If you want to hire more qualified candidates, you must first understand the qualities you are looking for in potential hires. You must also decide if you’re going to use job descriptions or conduct interviews when hiring.
Once you have determined your priorities, you can begin to implement changes to improve results.
Strategic Human Resources Management Benefits
Strategic HR involves careful consideration and analysis. Due to that, here are specific benefits of human resource strategic planning for businesses:
- Identify areas of weakness and strengths
- Develop strategies to address these weaknesses and strengths
- Establish sub-goals and objectives to measure progress toward the end goal
- Make sure there is alignment between business strategy and human resources strategy
- Ensure that all aspects of the organization revolve around the same set of goals and objectives
- Create a culture of continuous improvement
- Evaluate the effectiveness of programs and policies
- Increased job satisfaction
- Employee retention
Check our certified HR courses if you want to learn more about developing and implementing a strategic HR management plan. Master HR management and how to get the best out of your employees.
7 Steps to Creating a Strategic HR Plan
One of the main functions of HR is to provide an effective organization’s workforce management. It includes operational and strategic management and developing a plan that helps employees evolve. To do this, you need to start by determining the purpose of your human resource strategy.
Next, you need to look at the organizational structure of your company. How many levels are there? Do you have a different human resources department within each class? Are some divisions larger than others?
Some of the target outcomes for human resources planning include the following:
- Increase profitability through a strategic HR planning process
- Improve customer service
- Enhance employee morale and motivation
- Provide training and development opportunities
- Reduce turnover rates
- Maintain high-quality standards
Once you have these outcomes in mind, you can follow the following steps in developing a strategic HR department.
1. Define Goals
Defining goals helps you focus on a more strategic human resource management strategy. It gives you direction and provides a framework for measuring success. A goal is an objective you hope to achieve within a specific time frame. It’s something you want to accomplish. A plan is usually quantifiable. For example, you might say, “I want to increase my sales revenue by 20% to achieve a competitive advantage.”
Goals break down into sub-goals. The intermediate goals help you reach the ultimate goal. Additionally, they provide milestones in the strategic HR planning process. For example, if your ultimate goal is to increase sales revenue by 20%, then your intermediate goals can be:
- Achieve a 5% increase in sales revenue over last year.
- Achieve a 10% increase in sales revenue from January to June.
- Achieve a 15% increase in sales revenue during July.
It’s also essential to develop a SWOT analysis when defining your strategic HRM goals. The SWOT analysis helps identify any potential threats or obstacles that may hinder organizational success.
When conducting a SWOT analysis of your HR strategy, consider the following questions:
- What are your strengths?
- What are your weaknesses?
- Where are your opportunities?
- What are your threats?
Answering these questions will help you define business goals and improve business performance.
2. Determine Objectives
Objectives are measurable actions you take to meet your goals. They are how you achieve your goals.
Your objectives should be realistic. They should not be too ambitious. If they are too complicated, you may fail. You also don’t want them to be so easy that you will never succeed.
You should have a working strategic human resource management process to define specific human resource objectives for your business. Some examples include:
- Increase the number of new hires by 50%.
- Increase the average length of employment by three months.
- Reduce the percentage of employees who leave their jobs by 25%.
- Eliminate the use of temporary workers.
- Increase the number and proportion of women in management positions.
- Increase the proportion of senior managers with MBA degrees.
Your HR objectives should align with your overall company objectives. For example, if your company wants to increase its market share, setting up similar goals makes sense. Additionally, you should align all your HR objectives to your company’s financial objectives.
Keep in mind that the more tangible your objectives are, the easier it will be to measure progress.
3. Create Strategies
Strategic human resource management is all about the strategies you intend to use to achieve your objectives. They are the methods you’ll use to get there. There are many different strategies available. However, there are three main types.
- Change Strategy – This involves changing the current status quo or making changes that are already underway.
- Reinforcement Strategy – Involves reinforcing existing practices and policies.
- Innovation Strategy – Introduces new ideas and processes.
Your organization’s strengths and weaknesses are the foundation for your strategic human resource management. There isn’t a single best tactic. Instead, the best strategy depends on the situation.
4. Develop Tactics
Develop HR techniques you’ll use to implement your strategies. There are two kinds of tactics:
- Direct Tactics – These involve implementing your strategies immediately. Examples include hiring additional staff, promoting more people, giving raises to employees, and employee retention strategies.
- Indirect Tactics – These involve using other resources to support your strategies. Examples include advertising, training, outsourcing services, etc.
When developing strategic human resource management tactics, think about the results you expect from each tactic. Do you need immediate results? Or can you wait until later? How much money will you need? How much time do you have before you need to start seeing results?
It would be best to keep in mind that you can only do what you have authority over. So, if you’re trying to promote employees but they report directly to someone else, you won’t be able to do anything about it.
5. Plan Implementation
Planning is determining when, where, and how to execute each tactic. Planning includes deciding whether to act now, wait until later, or do nothing.
While implementing, it’s essential to closely monitor different factors that may affect the composition of a workplace. These factors include:
- Age – Older employees tend to have more significant experience than younger ones. Younger employees are usually less experienced. It can be hard to find good talent among young people.
- Gender – Women typically make up about half of the workforce. Men generally make up the rest. Companies with a higher proportion of female employees tend to have better performance.
- Race – People of color tend to earn lower salaries than white men. In addition, they are less likely to receive promotions.
6. Monitor Performance
Monitoring results is the process of evaluating what has happened after implementation. Monitoring includes measuring performance against pre-determined benchmarks. It also includes assessing the impact of any changes made by strategic HR management to improve effectiveness.
Monitoring performance is an ongoing activity. It requires constant attention. Monitoring helps determine what works and what doesn’t.
There are several tools you can use, including:
7. Evaluate Performance
Evaluating performance is critical in any HR department. It is the process of comparing actual results to expected outcomes. Evaluation can be done by analyzing data collected through monitoring and evaluation.
Evaluating your performance is crucial because it lets you know if your strategies are working. If not, then you need to change them. For example, if your HR strategies aren’t producing desired results, you might consider changing your approach, including outsourcing strategic human resource services.
Including strategic human resource management in the overall business strategy help with creating a productive environment, but it also helps with other crucial aspects such as retaining employees.
If the human resource department succeeds in creating an effective strategy, it brings value to the organization.
Take time to create the human resource management strategy. Having the right plan creates a streamlined process that’s easy to follow. Good luck.
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2.2 Writing the HRM Plan
- Describe the steps in the development of an HRM plan.
As addressed in Section 2.1 “Strategic Planning” , the writing of an HRM strategic plan should be based on the strategic plans of the organization and of the department. Once the strategic plan is written, the HR professional can begin work on the HR plan. This is different from the strategic plan in that it is more detailed and more focused on the short term. The six parts described here are addressed in more detail in Chapter 4 “Recruitment” , Chapter 5 “Selection” , Chapter 6 “Compensation and Benefits” , Chapter 7 “Retention and Motivation” , Chapter 8 “Training and Development” , Chapter 9 “Successful Employee Communication” , Chapter 10 “Managing Employee Performance” , and Chapter 11 “Employee Assessment” .
How Would You Handle This?
Compensation Is a Touchy Subject
As the HR manager, you have access to sensitive data, such as pay information. As you are looking at pay for each employee in the marketing department, you notice that two employees with the same job title and performing the same job are earning different amounts of money. As you dig deeper, you notice the employee who has been with the company for the least amount of time is actually getting paid more than the person with longer tenure. A brief look at the performance evaluations shows they are both star performers. You determine that two different managers hired the employees, and one manager is no longer with the organization. How would you handle this?
As you can see from this figure, the company strategic plan ties into the HRM strategic plan, and from the HRM strategic plan, the HR plan can be developed.
The six parts of the HRM plan include the following:
- Determine human resource needs. This part is heavily involved with the strategic plan. What growth or decline is expected in the organization? How will this impact your workforce? What is the economic situation? What are your forecasted sales for next year?
- Determine recruiting strategy. Once you have a plan in place, it’s necessary to write down a strategy addressing how you will recruit the right people at the right time.
- Select employees. The selection process consists of the interviewing and hiring process.
- Develop training. Based on the strategic plan, what training needs are arising? Is there new software that everyone must learn? Are there problems in handling conflict? Whatever the training topics are, the HR manager should address plans to offer training in the HRM plan.
- Determine compensation. In this aspect of the HRM plan, the manager must determine pay scales and other compensation such as health care, bonuses, and other perks.
- Appraise performance. Sets of standards need to be developed so you know how to rate the performance of your employees and continue with their development.
Each chapter of this text addresses one area of the HR plan, but the next sections provide some basic knowledge of planning for each area.
Determine Human Resource Needs
The first part of an HR plan will consist of determining how many people are needed. This step involves looking at company operations over the last year and asking a lot of questions:
- Were enough people hired?
- Did you have to scramble to hire people at the last minute?
- What are the skills your current employees possess?
- What skills do your employees need to gain to keep up with technology?
- Who is retiring soon? Do you have someone to replace them?
- What are the sales forecasts? How might this affect your hiring?
These are the questions to answer in this first step of the HR plan process. As you can imagine, this cannot be done alone. Involvement of other departments, managers, and executives should take place to obtain an accurate estimate of staffing needs for now and in the future. We discuss staffing in greater detail in Chapter 4 “Recruitment” .
Many HR managers will prepare an inventory of all current employees, which includes their educational level and abilities. This gives the HR manager the big picture on what current employees can do. It can serve as a tool to develop employees’ skills and abilities, if you know where they are currently in their development. For example, by taking an inventory, you may find out that Richard is going to retire next year, but no one in his department has been identified or trained to take over his role. Keeping the inventory helps you know where gaps might exist and allows you to plan for these gaps. This topic is addressed further in Chapter 4 “Recruitment” .
HR managers will also look closely at all job components and will analyze each job. By doing this analysis, they can get a better picture of what kinds of skills are needed to perform a job successfully. Once the HR manager has performed the needs assessment and knows exactly how many people, and in what positions and time frame they need to be hired, he or she can get to work on recruiting, which is also called a staffing plan . This is addressed further in Chapter 4 “Recruitment” .
Recruitment is an important job of the HR manager. More detail is provided in Chapter 4 “Recruitment” . Knowing how many people to hire, what skills they should possess, and hiring them when the time is right are major challenges in the area of recruiting. Hiring individuals who have not only the skills to do the job but also the attitude, personality, and fit can be the biggest challenge in recruiting. Depending on the type of job you are hiring for, you might place traditional advertisements on the web or use social networking sites as an avenue. Some companies offer bonuses to employees who refer friends. No matter where you decide to recruit, it is important to keep in mind that the recruiting process should be fair and equitable and diversity should be considered. We discuss diversity in greater detail in Chapter 3 “Diversity and Multiculturalism” .
Depending on availability and time, some companies may choose to outsource their recruiting processes. For some types of high-level positions, a head hunter will be used to recruit people nationally and internationally. A head hunter is a person who specializes in matching jobs with people, and they usually work only with high-level positions. Another option is to use an agency that specializes in hiring people for a variety of positions, including temporary and permanent positions. Some companies decide to hire temporary employees because they anticipate only a short-term need, and it can be less expensive to hire someone for only a specified period of time.
No matter how it is done, recruitment is the process of obtaining résumés of people interested in the job. In our next step, we review those résumés, interview, and select the best person for the job.
After you have reviewed résumés for a position, now is the time to work toward selecting the right person for the job. Although we discuss selection in great detail in Chapter 6 “Compensation and Benefits” , it is worth a discussion here as well. Numerous studies have been done, and while they have various results, the majority of studies say it costs an average of $45,000 to hire a new manager (Herman, 1993). While this may seem exaggerated, consider the following items that contribute to the cost:
- Time to review résumés
- Time to interview candidates
- Interview expenses for candidates
- Possible travel expenses for new hire or recruiter
- Possible relocation expenses for new hire
- Additional bookkeeping, payroll, 401(k), and so forth
- Additional record keeping for government agencies
- Increased unemployment insurance costs
- Costs related to lack of productivity while new employee gets up to speed
Because it is so expensive to hire, it is important to do it right. First, résumés are reviewed and people who closely match the right skills are selected for interviews. Many organizations perform phone interviews first so they can further narrow the field. The HR manager is generally responsible for setting up the interviews and determining the interview schedule for a particular candidate. Usually, the more senior the position is, the longer the interview process takes, even up to eight weeks (Crant, 2009). After the interviews are conducted, there may be reference checks, background checks, or testing that will need to be performed before an offer is made to the new employee. HR managers are generally responsible for this aspect. Once the applicant has met all criteria, the HR manager will offer the selected person the position. At this point, salary, benefits, and vacation time may be negotiated. Compensation is the next step in HR management.
What you decide to pay people is much more difficult than it seems. This issue is covered in greater detail in Chapter 6 “Compensation and Benefits” . Pay systems must be developed that motivate employees and embody fairness to everyone working at the organization. However, organizations cannot offer every benefit and perk because budgets always have constraints. Even governmental agencies need to be concerned with compensation as part of their HR plan. For example, in 2011, Illinois State University gave salary increases of 3 percent to all faculty, despite state budget cuts in other areas. They reasoned that the pay increase was needed because of the competitive nature of hiring and retaining faculty and staff. The university president said, “Our employees have had a very good year and hopefully this is a good shot in the arm that will keep our morale high” (Pawlowski, 2011).
Determination of compensation systems is a balancing act. Compensation should be high enough to motivate current employees and attract new ones but not so high that it breaks the budget.
Nathan Rupert – Venice Beach Tightrope Walker – CC BY-NC-ND 2.0.
The process in determining the right pay for the right job can have many variables, in addition to keeping morale high. First, as we have already discussed, the organization life cycle can determine the pay strategy for the organization. The supply and demand of those skills in the market, economy, region, or area in which the business is located is a determining factor in compensation strategy. For example, a company operating in Seattle may pay higher for the same job than their division in Missoula, Montana, because the cost of living is higher in Seattle. The HR manager is always researching to ensure the pay is fair and at market value. In Chapter 6 “Compensation and Benefits” , we get into greater detail about the variety of pay systems, perks, and bonuses that can be offered. For many organizations, training is a perk. Employees can develop their skills while getting paid for it. Training is the next step in the HR planning process.
Once we have planned our staffing, recruited people, selected employees, and then compensated them, we want to make sure our new employees are successful. Training is covered in more detail in Chapter 8. One way we can ensure success is by training our employees in three main areas:
- Company culture. A company culture is the organization’s way of doing things. Every company does things a bit differently, and by understanding the corporate culture, the employee will be set up for success. Usually this type of training is performed at an orientation, when an employee is first hired. Topics might include how to request time off, dress codes, and processes.
- Skills needed for the job. If you work for a retail store, your employees need to know how to use the register. If you have sales staff, they need to have product knowledge to do the job. If your company uses particular software, training is needed in this area.
- Human relations skills. These are non-job-specific skills your employees need not only to do their jobs but also to make them all-around successful employees. Skills needed include communication skills and interviewing potential employees.
Perform a Performance Appraisal
The last thing an HR manager should plan is the performance appraisal. While we discuss performance appraisals in greater detail in Chapter 11 “Employee Assessment” , it is definitely worth a mention here, since it is part of the strategic plan. A performance appraisal is a method by which job performance is measured. The performance appraisal can be called many different things, such as the following:
- Employee appraisal
- Performance review
- Career development review
No matter what the name, these appraisals can be very beneficial in motivating and rewarding employees. The performance evaluation includes metrics on which the employee is measured. These metrics should be based on the job description, both of which the HR manager develops. Various types of rating systems can be used, and it’s usually up to the HR manager to develop these as well as employee evaluation forms. The HR manager also usually ensures that every manager in the organization is trained on how to fill out the evaluation forms, but more importantly, how to discuss job performance with the employee. Then the HR manager tracks the due dates of performance appraisals and sends out e-mails to those managers letting them know it is almost time to write an evaluation.
Human Resource Recall
Have you ever been given a performance evaluation? What was the process and the outcome?
Communication Is Key in Performance Evaluations
(click to see video)
Communication is imperative in any workplace, but especially when giving and receiving a performance evaluation.
- Human resource planning is a process that is part of the strategic plan. It involves addressing specific needs within the organization, based on the company’s strategic direction.
- The first step in HR planning is determining current and future human resource needs. In this step, current employees, available employees in the market, and future needs are all analyzed and developed.
- In the second step of the process, once we know how many people we will need to hire, we can begin to determine the best methods for recruiting the people we need. Sometimes an organization will use head hunters to find the best person for the job.
- After the recruiting process is finished, the HR manager will begin the selection process. This involves setting up interviews and selecting the right person for the job. This can be an expensive process, so we always want to hire the right person from the beginning.
- HR managers also need to work through compensation plans, including salary, bonus, and other benefits, such as health care. This aspect is important, since most organizations want to use compensation to attract and retain the best employees.
- The HR manager also develops training programs to ensure the people hired have the tools to be able to do their jobs successfully.
- Of the parts of HR planning, which do you think is most difficult, and why? Which would you enjoy the most, and why?
- Why is it important to plan your staffing before you start to hire people?
- What is the significance of training? Why do we need it in organizations?
Crant, J., “How Long Does an Interview Process Take?” Jobsinminneapolis.com, December 2, 2009, accessed October 28, 2010, http://www.jobsinminneapolis.com/articles/title/How-Long-Does-an-Interview-Process-Take/3500/422 .
Herman, S., Hiring Right: A Practical Guide (Thousand Oaks, CA: Sage, 1993), xv.
Pawlowski, S., “Illinois State University to Get Salary Bump,” WJBC Radio, July 11, 2011, accessed July 11, 2011, http://wjbc.com/illinois-state-university-faculty-to-get-salary-bump .
Human Resource Management Copyright © 2016 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.
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The Role of Strategic Human Resource Management In Businesses
Many businesses these days recognize the importance of human resources management in achieving organizational success. After all, your employees are your most valuable asset . Many organizations still don’t quite understand the role strategic human resource management (SHRM) can play in their company. In this blog post, we’ll discuss what strategic HR is and how it can benefit your business.
We’ll also provide some tips on how to make sure your HR functions are performing optimally. So, if you’re looking to get the most out of your workforce, read on!
Defining Strategic Human Resource Management
Strategic human resource management can be defined as “the proactive planning and development of an organization’s most valued assets – its people.
It is a long-term, continuous process that aligns HR programs and initiatives with the company’s business goals .” In other words, it’s all about making sure your HR practices are aligned with your overall business strategy by taking a holistic view of your workforce and understanding how they fit into your larger picture.
There are many benefits to implementing strategic HR in your organization. Perhaps the most important business strategy is how you attract and retain top talent. With the right strategies in place, you can ensure that you’re attracting high-quality candidates who will be a good fit for your company. Strategic HRM can also help you develop your employees and ensure they have the skills and knowledge they need to be successful.
Another key benefit of strategic human resource management is that it can improve communication and collaboration between different departments within your organization. Lastly, Strategic HRM utilizes the talent and opportunity within the human resources department to make other departments stronger and more effective.
The Components Of Strategic Human Resource Management
There are four main components of strategic human resource management:
- Strategic planning
- HR policies and programs
- Employee development & performance management
Each of these areas is important in its own right, but they must all work together to create a cohesive SHRM system.
Strategic Planning: The first step in any strategic human resource management initiative is to develop a clear understanding of your business goals. What are you trying to achieve? How will your workforce help you get there? Once you have answers to these questions, you can begin to develop strategies for attracting, developing, and retaining the talent you need.
One thing to note is that strategic human resource management does not work independently. The HR department, for example, communicates with other departments in an organization to understand their goals and then develops plans that are consistent with those objectives as well as the broader company. As a result, the goals of a human resource department reflect and support the goals of the rest of the organization.
HR Policies and Programs: The next step is to put policies and programs in place that support your business goals. This might include things like employee onboarding, training and development, compensation and benefits, and performance management.
Employee Development: Once you have the right policies and programs in place, it’s time to start developing your employees. This means providing them with the skills and knowledge they need to be successful in their roles. It also involves helping them grow and progress in their careers.
Performance Management: The final piece of the strategic human resource management puzzle is performance management . This is all about setting clear expectations for employees and then measuring their performance against those expectations. Performance management can help you identify areas where employees need improvement and identify top performers who should be rewarded for their efforts.
Evaluating The Effectiveness Of Strategic Human Resource Management
Once you’ve put a strategic human resource management system in place, it’s important to evaluate its effectiveness with HR Analytics. There are a few key metrics a firm can use to do this:
Employee satisfaction: Do your employees feel like they’re being valued and supported ? Are they happy with their jobs? Employees are no longer looking for games and beer in the breakroom. The feeling of being truly valued cannot be bought. Employees need to feel this from their managers and senior leadership to have full buy-in. Use surveys and other feedback mechanisms to get insights into how employees are feeling.
Employee engagement: Are your employees engaged with their work? Do they feel like their talents are being used effectively? Again, surveys and feedback can help you gauge employee engagement levels. Utilizing HR business partners to be present in the day-to-day business can also help you gather and measure this metric.
Employee Retention rates: Are you losing good employees? If so, why? Strategic human resource management can help you identify the root causes of turnover and put policies in place to reduce it and help with retaining employees.
Productivity: Is your workforce as productive as it could be? Strategic HRM can help you identify areas where employees are struggling and put solutions in place to improve productivity.
By tracking these metrics, you can get a good idea of how well your strategic human resource management system is working. The role of strategic human resource management in business is clear. By attracting, developing, and retaining top talent, SHRM can help businesses achieve their goals. If you’re not already implementing SHRM in your organization, now is the time to start.
Need Help With Strategic Human Resources Management For Your Business?
Strategic human resource management is essential for any business that wants to be successful. By attracting, developing, and retaining top talent, SHRM can help businesses achieve their goals.
As we stated earlier, if you’re not already implementing strategic human resource management in your organization, now is the time to start. We offer practical HR solutions that are built to address those challenges for you. Our solutions are delivered through human resource Outsourcing, HR Project Support, Adding to your internal HR team, Conformity, Organizational Design, Culture Change, or Interim In-Person Assistance.
And with over 45 years of combined Human Resources expertise across a variety of sectors, including government contracting, publishing, media, technology, and consulting, our HR professionals are highly knowledgeable in all elements of HR and business strategy. You get the benefit of a full team of strategic HR specialists without having to pay for the overhead that comes with employing a whole-time staff, by having a strategic partner do it for you.
Human Resources Services We Offer
Below are some of the strategic human resource services we offer:
- Negotiate competitive offers
- Develop and support engaging new employee on-boarding and orientation
- Facilitate employee off-boarding and exit interviews
- Design strategic employee communications
- Develop policies and procedures for employee management
- Develop, document, and maintain processes on for the human resources function
- Comply with federal, state, and local laws
- Design benefit plan, which includes working with benefit broker, managing benefit cost, hosting open enrollment, maintaining all required documents, sending required notices, and developing a benefit plan to attract and retain talent
- Manage benefit administration
- Provide compensation thresholds (target salaries) by conducting a salary analysis of the current market
- Develop and manage all performance improvement and employee development plans
- Manage Worker’s compensation incidents
- Develop and implement performance reviews
- Develop and implement training as needed
- Manage all employee relation issues with appropriate internal staff
- Facilitate conflict resolution with managers and employees
- Coach managers and employees on employee and performance issues
- Drive employee performance improvement processes
- Collaborate with leadership on the designing, planning, and implementing employee relations programs, policies, and procedures
- Manage human resources best practices around employee relation issue compliance
- Implement harassment and discrimination prevention
Why You Need An Experienced Team To Handle Your SHRM
Without an experienced team to help with your SHRM, you’re bound to face a plethora of problems. Some of these barriers include:
Lack of understanding: There is still a lack of understanding about what SHRM is and how it can benefit businesses. This lack of understanding can make it difficult to get buy-in from senior leaders.
Resistance to change: Many businesses are resistant to change, including changes to how HR is managed. Businesses may be hesitant to invest in new strategic HR planning process processes because they’re not sure if they’ll work or if they’ll be worth the investment.
Lack of top management support: Strategic HR requires buy-in from the top. Without it, HR initiatives will be seen as a waste of time and money.
Lack of resources: Strategic HR requires dedicated resources, including staff, budget, and technology. If your organization doesn’t have the resources to invest in SHRM, you won’t be able to implement it effectively.
Lack of data: Strategic HR relies heavily on data. If your organization doesn’t have accurate data on things like employee turnover, engagement, and skills gaps, you won’t be able to make informed decisions about your workforce.
Lack of alignment: Strategic HR requires alignment between the HR function and the business goals of the organization. If there’s misalignment, HR initiatives will be less effective.
The Future Of Strategic Human Resource Management
Strategic human resource management is constantly evolving. This is because as the business world changes, so too must SHRM. New technologies, global expansion, and the ever-changing workforce are all having an impact on the way SHRM is practiced.
To stay ahead of the curve, our team ensures to keep up with the latest trends in SHRM. Here are a few things to watch out for in the coming years:
The rise of artificial intelligence: Artificial intelligence is starting to have a major impact on HR. AI can be used for recruiting, business performance management, and employee development.
The gig economy: The gig economy is growing rapidly, and it’s having a big impact on the way businesses operate. More and more people are working as contractors, which in turn, changes how HR functions. How do you incorporate this type of labor into your general workforce?
The war for talent: With unemployment rates at historic lows, businesses face a serious talent shortage. This is making it more important than ever to attract and retain top employees.
Reach Out To Us Today
If you need help with Strategic Human Resources Management or any other human resources function, reach out to us today . We would be happy to talk with you about your specific needs and see how we can help.
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